Cigarette sales are decreasing, so is the number of smokers. But the tobacco industry is doing extremeley well. Actually, cigarette manufacturers are reaching record revenue levels in the US.
While their US sales have gone down by 27% in 15 years, the revenue of tobacco industry companies has increased by 32%.
This surge in revenue can be explained through 4 main reasons
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The price of cigarettes has almost doubled due to a less competitive environment between major players: two companies, Altria and Reynolds American have 8 of the 10 most sold brands for a cumulated market share of more than 85%;
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Production costs have decreased;
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Regulatory constraints and taxes are comparatively lower in the US than in some other countries;
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Cigarette makers have invested in the electronic cigarette industry.
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